Enabling policy a must for every barrel of oil to count: Cairn CEO

How does one take economically sensible decisions that are also politically correct? This is a problem the country’s oil and gas sector is grappling with.

Companies that have invested in the sector, which involves huge risks, feel that to make every domestic barrel of oil count, an enabling policy framework, including clarity on gas pricing, is required.

Cairn India CEO P. Elango said on Monday the dilemma was that even if a decision was economically right, it may not be politically correct, leading to uncertainties.

So how does one take economically sensible decisions that are also politically right, he asked an audience of oil and gas industry heavyweights at the World Energy Policy Summit here.

Import reduction

Elango said the domestic oil industry had responded to growing demand with technical excellence — the Rajasthan oilfields were a fine example — and risk-taking capacity.

But this has to be supported with an enabling policy framework, he said. Though import dependence on crude oil would continue, exploration and production companies can definitely help reduce the quantum of imports.

‘Wider, deeper, faster’

Companies have the thirst to search here and now — wider, deeper and faster, Elango said, adding that the search will cost less than $5 a barrel.

As regards Cairn’s ventures in India, he said his company was in dialogue with the Ministry for Petroleum and Natural Gas on issues including continuation of exploration in Rajasthan.

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